(ASX: GGUS) | BetaShares Geared U.S. Equity Fund – Currency Hedged (hedge fund)

Jun 23, 2022

Sentiment: Bullish

Type of Trade: High Growth

Industry: ETF Hedge Fund

Sector: Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Information Technology, Communication Services, Utilities, Real Estate

GGUS provides investors with cost-effective geared exposure to the returns of the broad U.S. Markets, hedged for currency exposure too.

The Strategy of this fund is to broadly diversify the investor’s exposure to the largest 500 shares listed in the U.S by market capitalisation (as measured by the S&P 500 index).

This fund is geared by 50-65% (being the total amount borrowed expressed as a percentage of the total assets of the Fund). Remember that gearing magnifies gains and losses and may not be a suitable strategy for all investors, however it is far better than invest in a single stock from a company that can fail, despite it being a geared fund. Investors need to enter in this fund when the market is trading at low level or under SMA 40, even better if investors are able to enter when S&P 500 is trading under SMA 250.

 ✅ Excellent diversification

 ✅ Generally this fund will give investors double the return of the INDEX.

 ✅ S&P 500 has fallen and it is currently trading in a strategical entry point for either short and long term gain.

 ✅ This fund unlike holding the index, it pays in average 3.6% distribution to its holders being the Ex-Distribution date early July. Since the marek has taken a significant correction, it is likely that distribution will be higher than 5%.

Technical Analysis

If you have bought this ETF 52 weeks ago you would be 35% down, nevertheless, if you have bought this ETF during covid crash, the fund would have give investors over 300% return + distributions. When S&P 500 is back to all time highs, the fund could generate 92% return from today’s entry + the distributions. Since the S&P 500 is currently in downtrend, we believe that could be 15-20% profit opportunity in the short term.

Unlike individual stocks, this fund represents far less risk due the large diversification, nevertheless when the market is in downtrend, it is important to buy at the low points if attempt to pursue a quick trade.

Entry Details

There is no targets for this trade at moment.

At moment there are two green candles on the Heiken Ashi, suggesting a potential short term rally.

We believe that buying at the lower lows as you can see indicated at the bottom of the blue range can give investor a potential 15-20% short term profit. Traders must be nimble to exit once the Red Heiken Ashi Candle appears.

For short term traders, the key dates to be out of the fund regardless from 9th July which is 5-6 days next FED meeting. The market is likely to start reacting with fear and high volatility during the week that proceeds the next FED meeting.

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The information provided by BG Trading to you does not constitute personal financial product advice. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. BG trading recommends that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Past performance of any product discussed is not indicative of future performance. (We urge that caution should be exercised in assessing past performance. All financial products are subject to market forces and unpredictable events that may adversely affect their future performance).